Monday’s trading session produced a firmer US dollar as risk-appetite swayed from side-to-side. The buck exerted itself against the pound in particular which, at one point, saw itself down over 120 pips on the day. With EURUSD holding its ground against the greenback a lot better, the GBPEUR rate was dragged below the €1.14 handle before recovering into the European close.
Today sees a lot of activity on the US economic calendar with the latest set of inflation numbers from April. Forecasts are for the consumer price index to see a drop of 0.8%. This comes as no surprise with the US economy brought to its knees due to the pandemic. Also on today’s agenda, 4 FOMC (Federal Open Market Committee) members will be speaking. Members Bullard, Kashkari, Harker, and Quarles will all be carrying out speeches in the afternoon. These will be incredibly important in helping the market gauge just how much accommodation could still be provided from the world’s largest central bank. In turn, these new insights could help define how the US dollar trades in the near-term.
Elsewhere, the economic calendar is sparse. The only other major event taking place is the latest monetary policy announcement from the Reserve Bank of New Zealand. It’s highly likely the central bank will maintain its record low cash interest rate of 0.25%. The accompanying comments and guidance will be interesting as their economy is now truly getting back on its feet with the rate of infection in New Zealand practically zero.
Written by Viv Savani. 8:35am, May 12th 2020
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